If you default on your student loan: your loans may be turned over to a collection agency. You'll be liable for the costs associated with collecting your loan, including court costs and attorney fees. |
Details: You can be sued for the entire amount of your loan.
Your wages may be garnished. Federal law limits the amount that may be garnished to 20% of the borrower's take-home pay.
Your federal and state income tax refunds may be intercepted. The federal government may withhold part of your Social Security benefit payments. The US Supreme Court upheld the government's ability to collect defaulted student loans in this manner without a statute of limitations in Lockhart v US (04-881, December 2005 .
You'll be ineligible for deferments. Federal interest benefits will be denied. You may not be able to renew a professional license you hold.
Once a student loan goes into default status the full balance of the loan becomes due immediately. It also means that other options for delaying payment, including student loan deferment and forebearance, can no longer be used.
Eventually, unpaid defaulted student loans can have long-term consequences beyond just the loan directly. For example, your credit report will take a hit. Once the loan has been forwarded for collection your wages can be garnished and your federal income tax refunds can be withheld. You also lose your elgibility for other types of federal loans.
Call 888-401-0050 for assistance now.
Category: Student Loans